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Autumn Mini-Budget 2022

Below is a summary of items announced that may be relevant to FSL clients. For more detail, please refer to the GOV.UK website and the Growth Plan 2022 published by HM Treasury and HMRC it provides a thorough summary of all the tax-related changes.

Corporation Tax: Next year’s planned increase in corporation tax will be cancelled. The corporate tax rate will remain at 19%, adding an estimated £19 billion a year into the economy. This also means the UK will have the lowest corporate tax rate of G20 countries.

Investment/CGT: The annual investment allowance will not fall to £200,000 but will remain at £1,000,000. The planned increase in dividend tax will also be cancelled. Dividend tax will decrease to 7.5% and 32.5% ordinary and upper rates respectively.

Personal/Income Tax: The health and social care levy will be cancelled, as will the interim increase in National Insurance. This will be done by November 6th. Nevertheless, funding for the NHS and other social services will remain at the same level. From April 6th 2023, the additional rate of tax (currently 45%) will also be removed – there will instead be a single higher rate of income tax of 40%. The basic rate of income tax will be reduced to 19pence, a year earlier than expected from April 2023.

Stamp Duty: Stamp duty will be cut – there will be no stamp duty for the first £250,000 of a home’s value (double the previous rate) and no stamp duty for the first £425,000 of a home’s value for first-time buyers. This will mean that 250,000 people will be exempt from paying stamp duty.

SEIS: From April 6th 2023, companies can raise £250,000 of Seed Enterprise Investment Scheme (SEIS), an increase of two-thirds, and the gross asset limit will increase to £350,000. The annual investor limit will also increase to £200,000 (double the previous limit).

Along with these measures, the Chancellor also announced the “winding down” of the Office of Tax Simplification, noting that his team will be committed to making tax “simpler and fairer for families”.

 

The FSL Business Analysis team is actively analysing any potential changes today’s announcements will have on our products moving forward.